By Jon Peterson
Rockwood Capital has begun the marketing process of raising $1.25 billion of equity capital for its latest commingled fund Rockwood Capital Real Estate Partners Fund XI, as stated in a board meeting document for the Nebraska Investment Council.
Rockwood declined to comment when contacted for this story. Nebraska is planning to make a commitment of $40 million into the commingled fund. The fund manager is expected to invest $16 million as a co-investment into the fund.
Two primary markets where the investor has made a determination to pursue deals include the San Francisco Bay Area and Seattle. Its other main markets for the fund are Los Angeles, Boston, New York City and Washington, D.C. The fund manager has a regional office in San Francisco located at 50 California Street on the 30th Floor, as stated on its website.
Fund XI has a value-add investment strategy, and it will be looking for assets that can deliver net IRRs in the range of 12 percent to 14 percent. The targeted leverage on the fund will be 55 percent to 60 percent of total asset value and a maximum of 65 percent.
Most of the capital for the commingled fund will be invested in office buildings and multifamily residential. It will be considering some investments involving retail and hotel properties on a select and limited basis.
The commingled fund hopes to find assets that are in locations with high barriers to entry and are either in urban and evolving near-urban centers of primary cities.
Rockwood plans to employ several active asset management strategies to improve the properties that it acquires. These would include repositioning, re-leasing and/or development. The fund manager will not pursue investment opportunities where there is significant land entitlement.